BE discusses recent offer of Ag Center

August 3, 2014

While they expressed gratitude for the generous offer, the Blue Earth City Council has decided to proceed cautiously before accepting it.

Last Monday night the council held a special meeting just to discuss the offer from Bevcomm to donate the Ag Center to the city's economic development authority (EDA).

"My opinion is, it is a very nice offer," councilman Dan Brod said. "But we need to go at it with the attitude of buying a building. So, I think we need to have someone inspect it inside and out."

Councilman Russ Erichsrud quickly said he agreed 100 percent.

"We need to have someone who is a professional inspector come in," he said. "Someone who understands that kind of building."

The rest of the council agreed and voted to have city staff arrange for hiring a building inspector. The proposal for inspection would be discussed again at the next council meeting, set for Monday, Aug. 4.

Mayor Rick Scholtes asked how in depth the inspection should be, and council members responded that it should cover everything.

Councilman John Huisman suggested a contingency fund might be something needed, in order to fix any issues with the building which are found during the inspection.

The council also raised the concern of taking care of the facility should they accept it. Among the items were hiring a manager, collecting rent and taking care of maintenance, including snow removal.

"If it is being donated to the EDA then it will be up to them to find a manager and take care of the facility," Brod said. The council also said the cost of the inspection would also come out of EDA funds.

Another question had to do with property taxes, which the city would still have to pay, as well as the recent Highway 169 improvements assessments.

"Whoever owns the title owes the taxes," city attorney David Frundt said.

Councilman Glenn Gaylord asked if the city could turn right around and sell the Ag Center, and Frundt responded that is possible once ownership is acquired.

"I think we could talk to the tenants and see if there is any interest in their buying it," Gaylord said. However, councilman Huisman said he thought that option had been looked at in the past with no success.

The facility is actually four parcels with an estimated market value listed on the property tax statements of $1,029,000, interim city administrator Todd Bodem said.

However, it was pointed out that commercial property usually sells for an amount based on its rental income potential.

"I think we need to let Bevcomm know we are still very interested in this generous offer," Huisman said. "But we certainly need to do our due diligence on it first."